Conventional financial transaction processing methods and systems use a terminal, such as the ubiquitous Tranz 330 terminal manufactured by Verifone Corp., and a dialup telephone line to process financial transactions. A merchant provides the terminal, by entry of data on the keypad of the terminal and/or by running a credit or debit card through a magnetic track reader incorporated in the terminal, with information which describes a requested financial transaction. The terminal then uses the public switched telephone network to establish a connection with a host computer, transmits the information describing the financial transaction, receives a reply from the host computer relating to the requested financial transaction, acknowledges receipt of the reply from the host computer, and terminates the connection with the host computer. The terminal then provides, on its display, an approval or denial code or other relevant information relating to the requested financial transaction.
Although the transaction may have been authorized, another step is undertaken in order to settle the transaction. For example, a customer may be prepared to make a purchase and the customer's credit card purchase is authorized, but then the customer changes his mind and then does not make the purchase, or changes the amount of the purchase by adding a tip to the charge. Thus another set of transactions is undertaken, usually at a specific time of the day, to settle the day's transactions, posting all authorized and executed transactions, with their final amounts, at the host computer. This settlement is often referred to as "batch" processing, since all of the day's transactions are sent as a single batch of transactions on one phone call, rather than having a single transaction for each phone call to the host computer.
When the dialup connection is established between the terminal and the host computer, a path is established which allows data to be bi-directionally transmitted between the terminal and the host computer. Charges for dialup telephone access are assessed based on the type of call and the duration of the call. The dialup telephone access is often a "local" call, with no long-distance charges assessed. Some business phone lines, which a merchant might have, provide unlimited local calling, while other business phone lines are on measured service, wherein the duration of local calls is accumulated and used to calculate the phone bill. Occasionally the dialup access is provided via a "1-800" Wide Area Telephone Service (WATS) line, for the use of which the merchant is not directly charged by the phone company which provides the telephone service. Only rarely is the dialup access provided via a long-distance call. The dialup access is often a local call with unlimited service, or a measured-rate local call with a low per/minute billing rate. Thus, the duration of each telephone call to process a financial transaction and the amount of data that is transmitted in processing a financial transaction either do not affect the charges associated with the dialup telephone access or only produce minimal additional costs for the telephone service. The additional steps of the batch settlement do not add significantly to the phone call charges which a merchant may incur, since the phone call is usually a local call or a WATS call.
In contrast to local dialup telephone service, wireless telephone services, such as the analog or digital cellular telephone systems, and wireless data services, such as the Cellular Digital Packet Data (CDPD) network, assess charges based on the connection time, or number of data packets that are transmitted.
Some attempts have been made to use conventional financial transaction processing systems and methods with analog cellular telephone services. One method involves coupling the audio signals between the financial transaction device and an analog cellular telephone via an acoustic coupler, with the merchant hand-dialing the phone number of the host computer on the cellular telephone keypad. Motorola has manufactured cellular telephones with a built-in telephone jack and circuitry which adapts the cellular telephone so that it may be operated as if it were a land-line telephone, and the financial transaction terminal could be connected to this cellular telephone and used without modification to the conventional system and methods.
However, cellular telephone connections incur significant charges due to the lengthy time of the cellular telephone connection establishment and the lengthy time which the connection must be maintained in order to process the financial transaction. The time during which the connection between the terminal and the host computer is being established may be charged for by the cellular carrier, which may result in charges for 10-20 seconds of cellular air-time for each transaction processing request even while no financial transaction processing is actively occurring. Additionally, many cellular carriers charge for connection time on a whole-minute basis, so that a cellular telephone call which had a duration of only 20 seconds may be billed at a rate as if the cellular telephone call lasted for an entire minute. If the cellular telephone call lasts for one minute and one second, the charge for the cellular telephone call may be billed at the rate for two whole minutes.
Simply changing from the analog cellular telephone system to a digital data system, such as the Cellular Digital Packet Data (CDPD) network, does not eliminate the additional charges incurred with a wireless transmission system. Even if the terminal could be made to directly address a CDPD wireless modem to provide a connection to the host computer, transmit the requested financial transaction and receive the response from the host computer, the conventional systems and methods of financial transaction processing would incur significant charges due to the number of data packets which are transmitted by conventional methods. Conventional methods may require packets to establish the connection between the terminal and the host computer and start the transaction process, one or two data packets to transmit the requested financial transaction, one or two packets to provide the response for the requested transaction, one data packet to acknowledge receipt of the response from the host computer, and more data packets to close the connection. If there are transmission errors or synchronization errors which require re-transmission of data packets the total number of data packets per requested financial transaction rises further.
Conventional batch settlement processing systems and methods are not efficient when used with wireless transmission systems. What is needed is a method of optimizing financial transactions, including the batch settlement transactions, which are generated by conventional transaction processing equipment for efficient use with wireless transmission systems.
It is an object of the invention to provide a method of settlement batch processing which may be used when a conventional financial transaction processing point-of-sale terminal is used with a wireless transmission system.
It is a further object of the invention to provide a method of settlement batch processing so as to minimize the number of data packets transmitted in the settlement batch processing.
It is a still further object of the invention to provide a method of settlement batch processing in a manner such that no changes to the operation of the terminal need to be made in order to use the method of the invention.
A still further object of the invention is to provide methods which may be used to determine if a conventional financial transaction processing point-of-sale terminal is requesting a single transaction authorization or a settlement batch process.